B-130105, JAN. 3, 1957

B-130105: Jan 3, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 14. WAS AWARDED. WAS ACCEPTED ON MARCH 23. THE CONTRACTING OFFICER ADVISED THE CORPORATION THAT THE WHEEL ASSEMBLIES COVERED BY ITEMS 2 AND 3 HAD BEEN RECEIVED BUT THAT SUCH ASSEMBLIES WERE FOUND TO BE INCOMPLETE SINCE THEY WERE TO BE ASSEMBLED WITH TIRES MOUNTED. THE CONTRACTING OFFICER ADVISED THE CORPORATION THAT THE WHEEL ASSEMBLIES HAD BEEN RETURNED TO IT FOR MOUNTING OF THE TIRES AND THAT SINCE ERROR WAS NOT ALLEGED BY THE CORPORATION UNTIL AFTER THE AWARD HAS BEEN MADE. ITS REQUEST FOR ADDITIONAL COMPENSATION WOULD HAVE TO BE SUBMITTED TO HIGHER AUTHORITY FOR A DECISION. THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF.

B-130105, JAN. 3, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 14, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC., NEW YORK, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT (PURCHASE ORDER NO. 56 A5440) DATED MARCH 23, 1956, WAS AWARDED.

IN RESPONSE TO REQUEST FOR QUOTATION NO. 1408, ISSUED BY THE CONTRACTING OFFICER, UNITED STATES MILITARY ACADEMY, WEST POINT, NEW YORK, THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC., SUBMITTED THE FOLLOWING BID:

TABLE

UNIT

QUANTITY UNIT PRICE AMT. "/1) 01166900 COUNTERWEIGHT ASSEMBLY,

MANIFOLD HEAT CONTROL

VALVE (851177)

(CO C4003216) 1 EA. 1.16 1.16

(2) 13966001 WHEEL ASSEMBLY, DRIVE

AXLE (W/TIRE MOUNTED)

(100422) 2 EA. 107.92 215.84

(3) 13971300 WHEEL ASSEMBLY, STEERING

AXLE (W/TIRE MOUNTED)

(100412) 2 EA. 25.64 51.28"

THE RECORD INDICATES THAT THE CORPORATION USED THE REQUEST FORM SENT TO THE GEORGE P. CLARK COMPANY, NEW YORK, NEW YORK, AND THAT THE NUMBERS (100422) AND (100412) APPEARING IN THE DESCRIPTION OF ITEMS 2 AND 3 REPRESENT THE PART NUMBERS OF THAT COMPANY FOR THE WHEEL ASSEMBLIES WITHOUT TIRES. THE BID OF THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC., THE ONLY BID RECEIVED ON THE ASSEMBLIES, WAS ACCEPTED ON MARCH 23, 1956.

IN A LETTER DATED APRIL 26, 1956, THE CONTRACTING OFFICER ADVISED THE CORPORATION THAT THE WHEEL ASSEMBLIES COVERED BY ITEMS 2 AND 3 HAD BEEN RECEIVED BUT THAT SUCH ASSEMBLIES WERE FOUND TO BE INCOMPLETE SINCE THEY WERE TO BE ASSEMBLED WITH TIRES MOUNTED. BY LETTER DATED MAY 1, 1956, THE CORPORATION ADVISED THAT THE PRICES QUOTED FOR THE WHEEL ASSEMBLIES DID NOT INCLUDE THE COST OF THE TIRES AND THAT THAT PART OF THE SPECIFICATIONS "W/TIRE MOUNTED" HAD BEEN OVERLOOKED. THE CORPORATION REQUESTED THAT A CHANGE ORDER BE ISSUED FOR THE TIRES WHICH, IT STATED, COST $46.02 EACH FOR ITEM 2 AND $29.33 EACH FOR ITEM 3. BY LETTER DATED MAY 11, 1956, THE CONTRACTING OFFICER ADVISED THE CORPORATION THAT THE WHEEL ASSEMBLIES HAD BEEN RETURNED TO IT FOR MOUNTING OF THE TIRES AND THAT SINCE ERROR WAS NOT ALLEGED BY THE CORPORATION UNTIL AFTER THE AWARD HAS BEEN MADE, ITS REQUEST FOR ADDITIONAL COMPENSATION WOULD HAVE TO BE SUBMITTED TO HIGHER AUTHORITY FOR A DECISION.

BY LETTER DATED JUNE 12, 1956, THE CORPORATION SUBMITTED AN INVOICE IN THE AMOUNT OF $150.70 TO COVER THE ALLEGED COST OF THE TIRES, TOGETHER WITH THE PRICE LIST OF ITS TIRE SUPPLIER AND A CATALOG SHEET OF ITS WHEEL ASSEMBLY SUPPLIER, THE CLARK EQUIPMENT COMPANY.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE CONTRACTING OFFICER HAS REPORTED THAT HE HAD NO REASON TO SUSPECT AN ERROR IN THE BID OF THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC., AS TO ITEMS 2 AND 3 BECAUSE THE ASSEMBLIES REQUIRED UNDER THOSE ITEMS HAD NOT BEEN PREVIOUSLY PURCHASED BY HIS OFFICE AND THAT, SINCE THE CORPORATION'S BID WAS THE ONLY ONE RECEIVED, NO BASIS FOR COMPARISON OF PRICES WAS AVAILABLE TO HIM FOR APPRAISAL PURPOSES. IN VIEW OF THIS, IT MAY NOT REASONABLY BE CONSIDERED THAT THE CONTRACTING OFFICER WAS, OR SHOULD HAVE BEEN, ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID AND SHOULD THEREFORE HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO ITS ACCEPTANCE. ALTHOUGH, AFTER AWARD, THE CORPORATION FURNISHED CERTAIN PRICE DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE CORPORATION IN COMPUTING ITS BID PRICES ON THE ITEMS IN QUESTION. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE CORPORATION UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, IN THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO ACCORDING TO THE PLAIN LANGUAGE THEREOF. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. SEE ALSO, 20 COMP. GEN. 652, AND 26 ID. 415.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120, 163. IF THE PRICES QUOTED BY THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC., FOR THE ASSEMBLIES COVERED BY ITEMS 2 AND 3 DID NOT INCLUDE A CHARGE FOR THE TIRES, AS ALLEGED, SUCH ERROR WAS DUE SOLELY TO LACK OF PROPER CARE ON THE PART OF THE CORPORATION AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE CORPORATION TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, ON THE RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFYING THE PRICES SPECIFIED IN PURCHASE ORDER NO. 56-A5440 FOR ITEMS 2 AND 3, AS REQUESTED BY THE GEORGE INDUSTRIAL EQUIPMENT COMPANY, INC.

THE CONTRACTING OFFICER'S STATEMENT OF JUNE 21, 1956, AND SECOND INDORSEMENT DATED NOVEMBER 7, 1956, OF THE SUPERINTENDENT OF THE UNITED STATES MILITARY ACADEMY, ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.